Gopal Pandey is a chaivala, a tea-seller. His small stall is in one of the lanes off Chandni Chowk, the bustling main street of old Delhi. It's a precarious toehold on the economic ladder and, to make things more difficult, Gopal looks out on the world through spectacles so scratched that he barely sees at all. They do, however, confer on everything a hazy, comfortable blur. Gopal Pandey trusts people. He believes what they tell him.

Sujit Saraf's novel tells the tale of India's communal upheavals between 1984 and 1998, and by placing a dolt at the very centre of events he comes close to making sense of all the horrifying absurdities. The story begins on the day that Indira Gandhi is assassinated by her Sikh bodyguards. In the bloody aftermath, Gopal hides a Sikh in his tea stall, setting in train a series of events that will lead to his own incredible rise in fortunes. Over the following years the world around Gopal is teased apart. Every self-interested aquaintance, every class and caste, all are pinned down and exposed by Saraf's prose. He has a gift for getting under the skin of a vast range of humanity: I wouldn't say it was done with love, rather with the kind of keen interest that a dedicated coleopterist reserves for cockroach dissection. The parts may be rather sticky and smelly but - by God! - see what a fabulously complex monster they produce.

Take Sohan Lal, a seth or trader. He is pretty sure that he is the backbone of Chandni Chowk and, consequently, India. Sitting in his shop opposite Gopal's chai stall, he muses on the best ways to buy loyalty or sell daughters. When his self-centred prejudices spill out into politics, we watch the canker spread. Around him gather a motley crew of Hindu activists, all solid dependable chaps - Saraf is relentless at nailing down where the Hindu religious extremism of the 1990s came from, concluding, it seems, that it was more about jaundiced old men than saffron-clad youth. It's an astute point and all the more convincing for the range of plausibly grotesque pillars of the community who, we discover, are grubbing their way to power.

To these political schemers, Gopal and his fellow street-people are mere chessboard pawns, to be shifted and sacrificed at leisure. Their voices can be bought to shout slogans, their muscles are useful in fights and their children are handy for sex. This is a dark world in which Muslims blow up mosques hoping to provoke Muslims while all the time they were manipulated by Hindus hoping to provoke Hindus. Imagine an India where every rumour and conspiracy theory on the street turned out to be true, and you have the flavour of The Peacock Throne. Delhi folk will bridle at such a vicious portrayal of their city, but it is highly entertaining.

After Indira's death come the major turning points in Indian politics: the Mandal Commission, the Ayodhya dispute and then the elections of 1996 and '98. Saraf moves his pawns through these momentous events with breathtaking subtlety. Gauhar, the illiterate Bangladeshi urchin adopted by Gopal, is by far the most entertaining player. His development from quick-witted small boy to embittered street thug is terrifyingly convincing, all the more so when he becomes a key figure in the Ayodhya mosque/temple dispute - a conflict that Saraf rightly places at the heart of his story. Gopal, of course, is wonderfully oblivious to all the shenanigans and hanky-panky around him. In the end, when all else are mired in corruption and controversy, Gopal rises. Unfortunately, a democratic public position also demands new spectacles, and with vision comes disillusionment. The people around him who had appeared so dependable turn out to look like shifty sneaks.

The benefits of success are equally disappointing: you get to wear silk, but must hand it back afterwards; you even get to meet the prime minister, but - would you believe it? - protocol demands that you don't mention the problem with the drains. Things are scarcely better than at the tea stall, where paying customers are outnumbered by freeloaders. Never mind - we all know that in the end tea and politics are not so different: make it sweet and the punters will swallow anything.

· Kevin Rushby's Paradise: A History of the Idea that Rules the World is published by Constable & Robinson